The Liability Reform for Volunteer Service Act

(S. 514): What it Does

Introduced by Senator John Ashcroft

Bill Summary

Prior to the last decade, the number of lawsuits filed against volunteers
barely was noticeable. However, in the mid- 1980's, that changed and the
possibility of personal liability was on the minds of a growing number of
volunteers.

Volunteers, who selflessly give their time and energy to nonprofit organizations
which vary from the Boy Scouts and Little League to the American Red Cross
and Salvation Army, often find themselves in court facing lawsuits for their
volunteer activities. The mere threat of lawsuits increasingly deters volunteers
from donating their time and directly restricts the ability to provide important
services. As far back as 1988, a study titled "The Liability Crisis
and Use of Volunteers by Nonprofit Associations" found that approximately
one in ten nonprofit organizations had experienced the resignation of a
volunteer due to liability concerns and that one in six volunteers reported
withholding their services due to fear of exposure to liability suits.

The study also found:

1 out of 7 nonprofit agencies had eliminated one or more of their valuable
programs because of their exposure to lawsuits;

16% of volunteer board members surveyed reported withholding their services
to an organization out of the fear of liability; and

The average reported increase in insurance premiums for nonprofits over
the previous three years (1985-1988) was 155%, and one in eight organizations
reported an increase of over 100%.

This study demonstrated clearly that the threat of lawsuits has had a
negative effect on volunteer participation in charitable organizations thus
jeopardizing the ability of charities to serve.

Although most states have adopted legislation since that time to protect
volunteers, the statutes vary in their definitions and in the scope of immunity
granted the situation has not improved. According to the Nonprofits' Risk
Management and Insurance Institute, every state has a provision applying
to directors and officers of organizations. However, many states have not
provided immunity for direct service volunteers. About half of the states
have provisions for general volunteers, while approximately 20 states focus
specifically for volunteers in sports-related activities.

Volunteers play an integral part in community service and should not
fear litigation when they serve their communities. In order to encourage
the volunteerism needed to meet the needs of our children, our senior citizens,
the disabled and the nation as a whole, comprehensive legislation must be
enacted to protect volunteers from frivolous litigation.

Organizations and Volunteers Covered

The Liability Reform for Volunteer Services Act protects "volunteer
service organizations" which are defined as "nonprofit organizations
that are organized for the public benefit and operated primarily for charitable,
civic, educational, religious, welfare, or health." Health care providers
are specifically excluded from coverage.

Individuals who provide volunteer services to such nonprofit organizations
or governmental entities also are covered if they are acting in good faith,
within the scope of their official duties, and do not receive any compensation
or material benefits for their services.

Punitive Damages

The bill establishes a uniform standard for awarding of punitive damages
(damages which are designed to punish the defendant or deter others from
engaging in the same activity) against volunteer services organizations
or a volunteer. Those suing charities and volunteers would be required
to establish by "clear and convincing evidence" that the organization
or its volunteers acted with a "conscious, flagrant indifference to
the rights or safety of others" and that such conduct caused the harm
for which the suit is brought. This "clear and convincing standard"
is slightly higher than the "preponderance of the evidence" standard
used in most civil cases, but is less than the criminal standard which requires
evidence to be "beyond a reasonable doubt."

Punitive damages also would be capped at two times economic (loss of
earnings, medical expenses, loss of business opportunities, etc.) and noneconomic
(pain and suffering, emotional distress, etc.) losses, or $250,000, whichever
is less. The bill prohibits courts from disclosing the existence of the
cap to juries.

So as to not influence the jury, either party to a lawsuit also may require
that the court proceedings to determine whether punitive damages should
be awarded be dealt with separately from the issue of liability.

Proportion of Fault

Volunteer service organizations and volunteers would be liable for damages
only in direct proportion to the degree to which they are responsible for
the damages. This would prevent charities from becoming targets of lawsuits
simply because they are the deepest pockets available.

Excluded Actions

The protections for organizations and volunteers in this bill would not
apply anytime the actions involved constitute a crime of violence, terrorism,
a hate crime, a civil rights violation, or a sexual offense for which a
conviction has been obtained against the volunteer or organizations. The
protections also do not apply whenever a volunteer has been found to have
been under the influence of alcohol or drugs.